Report in which the committee requests to be kept informed of development - Report No 324, March 2001

Case No 1980 (Luxembourg) - Complaint date: 13-JUL-98 - Closed

Allegations: Legislation in violation of the right to bargain collectively

1. 623. In its communications dated 13 July, 2 September and 27 November 1998, the Luxembourg Association of Bank and Insurance Employees (ALEBA) presented a complaint of violations of freedom of association against the Government of Luxembourg. ALEBA provided additional information in communications dated 6 January and 25 October 2000.
2. 624. The Government sent its observations in communications dated 21 September 1999, and 4 February, 17 and 22 March, 16 May and 27 October 2000.
3. 625. Luxembourg has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98). However, it has not ratified the Collective Bargaining Convention, 1981 (No. 154).

A. The complainant's allegations

1. 626. The Luxembourg Association of Bank and Insurance Employees (ALEBA) alleges that both Luxembourg legislation and its application infringe freedom of association and complains in particular that it is not recognized as a representative trade union.
   • Brief presentation of ALEBA and trade unionism in Luxembourg
2. 627. ALEBA explains that labour law in Luxembourg is characterized by a marked distinction between manual workers and salaried employees, with the latter consisting of workers in predominantly intellectual activities. The law also draws a distinction between private sector salaried employees and those employed by a public legal entity, who have a different status.
3. 628. ALEBA is a union of workers and more particularly a union of private sector salaried employees. ALEBA has 9,200 members, drawn primarily from the 19,195 employees of banks and insurance companies established in Luxembourg (1998 data from the Chamber of Private Sector Salaried Employees). In November 1998, during the most recent elections to the Chamber of Private Sector Salaried Employees, ALEBA received 68 per cent of votes in the banking and insurance group (group III) and hence is the majority trade union in that group by a large margin. Besides banking and insurance salaried employees, ALEBA has approximately 1,200 members working in other sectors, notably in commerce and services (group IV).
4. 629. ALEBA states that Luxembourg has three trade union federations: the Federation of Private Sector Salaried Employees-Independent Federation of Workers (FEP-FIT), with a membership among private sector salaried employees; the Luxembourg Confederation of Christian Trade Unions (LCGB); and the Independent Trade Union Confederation of Luxembourg (OGB-L). The latter two are essentially and historically organizations of manual workers, though little by little they have established sectoral representation for private sector salaried employees in the various branches of economic activity.
5. 630. Until 1976, ALEBA was affiliated to the FEP-FIT. Because of internal conflicts in that organization, which, according to the complainant, were endless and brought about its ruin, ALEBA resigned its membership, and was followed in this respect by the steelworkers and by many salaried employees of small and medium-sized enterprises.
6. 631. ALEBA emphasizes that it is by far the largest and most important trade union outside the trade union federations. In this context, ALEBA recalls that it led all of the negotiations of the collective agreements signed within the banking and insurance group; these were declared generally binding, except for one in 1993 which was negotiated and signed by a sectoral minority. The latest collective agreement is the one signed for the 1996 to 1998 period, which was also declared generally binding. The president of ALEBA was designated spokesperson for the inter-union grouping during the negotiations, which the complainant believes proves that it and its president are recognized by their peers and by their social partners as valid interlocutors in every respect.
7. 632. Moreover, the complainant emphasizes that the failure to recognize it as representative has direct repercussions for social plans negotiated by it. It states that, in a letter of 14 May 1998, the Minister of Labour rejected a social plan negotiated following the merger of two German banks on the pretext that ALEBA was not a representative trade union organization on the national level and was therefore not in a position to negotiate and sign a social plan.
   • Examination of the Luxembourg legislation under criticism
8. 633. The law at the centre of the complaint ("the 1965 Act") was adopted on 12 June 1965 and concerns collective agreements. Having defined in section 1 what is meant by collective agreement, the Act provides in section 2, paragraphs 1, 2 and 3, that:
   • Only trade unions that are the most representative at the national level may be parties to a collective agreement: Provided that individual employers or groups of employers may be parties to such an agreement.
   • All occupational groups having their own organization with the objective of representing their members, defending their occupational interests and improving their living conditions shall be deemed to be trade unions.
   • The most representative trade unions shall be deemed to be those which are distinguished by their large membership, by their activities and their independence.
9. 634. ALEBA subsequently refers to the preparatory work which preceded the adoption of the 1965 Act in order to emphasize the fact that the reference to the "national level" in section 2(1) was added without any proper discussion. During the regular session of the Chamber of Deputies in 1961-62, the Government put forward a draft Act pursuant to which collective agreements could be signed by "trade unions sufficiently representative of the occupational interests affected" (parliamentary document No. 919, regular session of 1962-63, page 2). This wording met with no specific objection by the Council of State or the competent committee of the Chamber of Deputies. Acknowledging the lack of a precise definition of "representative organizations", the Council of State left "to the competent minister sufficient scope to assess in each case the representative nature of different trade unions" (parliamentary document No. 919, regular session of 1962-63, page 2). However, if the Chamber of Deputies judged it appropriate to define these concepts, the Council of State would suggest that it "keep to specific criteria and provide [for the term 'representative organizations'] the following definition: 'The most representative trade unions shall be deemed to be those which are distinguished by reason of their large membership, by their activities and their independence'." (ibid.). The complainant recalls that the Chamber of Deputies adopted the observations of the Council of State. However, a year later, in 1964-65, the Government intervened in the regular session of the Chamber of Deputies to modify the agreed text in order to add to the concept "most representative trade unions" the qualifier "at the national level", claiming that it was "essential that a trade union's activities extend beyond the limited field of a single enterprise or a single economic sector". The Council of State did not oppose the modification. The modified text was adopted and became the text of section 2(2) of the 1965 Act as it stands today.
10. 635. ALEBA notes that the 1965 Act was addressed in three cases, the first being an arbitration decision of 10 November 1979 (Pasicrisie 24, pages 386 et seq.). According to that decision, a trade union in order to sign a collective agreement must, under the 1965 Act, prove that it fulfils simultaneously the criteria of both national and multi-sector representation. National representation is taken in this context to mean sectoral representation with a geographic spread covering the entire country, rather than a regional or local representation. Consequently, it is not enough for a trade union to have a strong sectoral representation in order to be representative and be the sole signatory to a collective agreement: the union must be represented throughout the country and in different sectors of activity.
11. 636. This precedent was confirmed by two subsequent decrees of the Council of State in June 1980 and July 1988, which specified notably that a union must, in order to claim to be representative, demonstrate a level of membership and thus a certain following in different sectors of economic activity (digests of administrative decrees of the Council of State, Volume for 29 January 1980 to 18 December 1980 (No. VIII). See also ibid., Volume for 26 March 1987 to 22 July 1988 (No. XII)).
12. 637. According to the complainant, the legal result of such an interpretation is to deprive it of the status of a representative trade union since it does not have national representation considered to be multi-sectoral within the meaning of the jurisprudence of Luxembourg, even though it represents approximately two-thirds of the voting salaried employees of group III, "banking and insurance".
    • Identification of violations of freedom of association
13. 638. The complainant stresses that freedom of association is among the freedoms known as "Abwehrrechte gegen den Staat", freedoms which essentially constitute a defence against the State's authority to intervene by means of general standards in the exercise of the guaranteed freedoms other than in order to promote their exercise or to limit the exercise of one group's freedoms in relation to those of another group. In no case may the State make one group's freedom depend on the goodwill of another.
14. 639. ALEBA makes reference to the international labour Conventions, alleging that the actual state of Luxembourg law violates the elementary principles developed in the Conventions. ALEBA states notably that the Preamble to Convention No. 87 places freedom of association and the protection of trade union rights on an equal footing. It is provided expressly in Article 3(2) that "the public authorities shall refrain from any interference which would restrict this right or impede the lawful exercise thereof". Moreover, the complainant states that Convention No. 87 makes provision for the right to form federations and confederations, but that no obligation is imposed in this respect. Concerning Convention No. 98, ALEBA remarks that Article 4 provides that "measures appropriate to national conditions shall be taken, where necessary, to encourage and promote the full development and utilisation of machinery for voluntary negotiation [...] of collective agreements". ALEBA also mentions the Collective Agreements Recommendation, 1951 (No. 91), and the Collective Bargaining Recommendation, 1981 (No. 163), which refer to the determination of the representative organizations. In addition, ALEBA notes that Recommendation No. 163 provides that "measures adapted to national conditions should be taken, if necessary, so that collective bargaining is possible at any level whatsoever, including that of the establishment, the undertaking, the branch of activity, the industry, or the regional or national levels" (Paragraph 4(1)). The complainant concludes therefore that the dual (national and multi-sectoral) representation required for the signing of a collective agreement under the law of Luxembourg does not respect the principles of freedom of association.
15. 640. The complainant maintains that, if it is true that only representative unions can sign collective agreements, it is sufficient for their representative status to be evaluated on the basis of the sector concerned.
16. 641. In addition, ALEBA maintains that the concept of national representation should be interpreted in contrast with purely local or regional representation. Representation within a sector is thus quite sufficient on condition that it is national, i.e. representative on the national scale for a given sector. ALEBA adds that it is in any case perfectly multi-sectoral in that it is represented in at least two quite distinct sectors.
17. 642. ALEBA also considers that Luxembourg is violating its own law in disputing its national representative status on the pretext of multi-sectoral representation through the confusion of "group" in the context of the legislation on the Chamber of Private Sector Salaried Employees with "economic sector". In order to ensure some level of proportional representation in that body, the number of its members by group of activity group is governed by law. The concept of group is not synonymous with that of sector. The group is a somewhat arbitrary unit, established for a specific purpose, whereas a sector is a much broader and more general socio-economic concept.
18. 643. In a subsequent communication dated 6 January 2000, ALEBA provides information concerning developments in the situation since the complaint was presented. It points out amongst other things that on 16 July 1998 the trade union "Union of Private Sector Employees" (UEP) was established to defend the interests of all private sector employees in Luxembourg. ALEBA and UEP formed a trade union federation on 27 April 1999. UEP participated in the November 1998 social elections and obtained 6.95 per cent of votes of employees electing the statutory body of the private sector employee's health insurance fund. In the same elections ALEBA obtained 17.063 per cent of all votes, totalling 23.99 per cent for ALEBA and UEP together. In addition, ALEBA and the ALEBA-UEP federation signed a collective agreement on 29 April 1999 that had been negotiated with the Association of Banks and Bankers of Luxembourg (ABBL). ALEBA states that on the recommendation of the Director of the Labour and Mines Inspectorate, the Minister of Labour and Employment issued an order refusing to register this collective agreement on the pretext that ALEBA does not possess the degree of representativeness at the national level that is required in order for it to be the sole signatory of collective agreements. On 22 December 1999 the complainant applied to the administrative tribunal for a stay of execution and conservatory measures with respect to the Minister's decision. In a decision of 14 January 2000 the court refused the application for a stay of execution but granted the application for a conservatory order for the purpose of temporarily applying the measures provided for in the collective agreement between ALEBA and the ABBL pending a decision on the substance of the case.
19. 644. Finally, in a communication of 25 October 2000, the complainant organization sent a copy of the judgement issued by the Administrative Tribunal of Luxembourg, which recognizes the national representativity of ALEBA for the purpose of signing collective agreements.

B. The Government's reply

• Description of ALEBA
  645. 645 The Government acknowledges that ALEBA has a significant, though not exclusive, following in the banking and insurance sector. This sector is part of the occupational category of private sector employees, which, according to the surveys upon which the 1998 social elections were based, consists of 94,412 employees, 19,543 of whom work in the banking and insurance sector. The Government notes that ALEBA claims to represent 9,200 employees, which is 9.7 per cent of the country's private sector employees.
  646. 646 The Government refers to three electoral results which can be used to measure the level of a trade union's influence:
       • - elections to the occupational chambers;
       • - elections to the management organs of the social security institutions; and
       • - elections to the staff delegations of enterprises.
  647. There are two occupational chambers, which provide the general, effectively parliamentary representation of an occupation. The representatives of the 94,412 private sector employees working in Luxembourg are elected to the Chamber of Private Sector Salaried Employees. These private sector employees are divided into six groups, depending on the size and economic importance of the sector: private sector salaried employees in industry (four seats), in the steel industry (three seats), in banking and insurance (eight seats), in commerce (13 seats), in health care (four seats) and in the rail system (six seats). ALEBA is represented only in the "banking and insurance" group, in which it gained 68.19 per cent, or six seats in total. While the Government recognizes that ALEBA's importance in the banking and insurance sector cannot be denied, it emphasizes that only 37.89 per cent of potential electors participated in the elections and that ALEBA is far from the exclusivity or monopoly of representation it claims to have. Moreover, the six seats gained should be viewed in the context of the total number of seats in the Occupational Chamber (38), since Luxembourg does not have separate categories for banking and insurance employees. From the Government's point of view, ALEBA's six seats represent merely 15 per cent of the total seats in the institution representing the occupational category of private sector employees in Luxembourg.
  647. 647 The situation in the management organs of the social security institutions is similar. The members are elected to the following organs:
       • - management organs of health insurance or pension funds;
       • - management organs of the occupational accident insurance association or the social contributions' registration and collection centre;
       • - management organs of the dependants' insurance fund and the public welfare fund;
       • - social jurisdictions.
  648. The management organs of the health insurance funds for the different occupational categories (manual workers, private sector employees and civil servants) have a total of 145 workers' delegates. The Government notes that four of them, or 2.75 per cent, are from ALEBA. The health insurance fund for private sector employees specifically has 42 delegates, of whom four are from ALEBA, representing 9.52 per cent. Consequently, according to the Government, ALEBA represents only 9.52 per cent of private sector employee delegates in the management organs of the health insurance fund for private sector employees. In the general assembly of the pension fund for private sector employees, there are two ALEBA representatives among a total of 15 members, in other words 13 per cent. ALEBA is not represented in the management committee of the pension fund.
  648. 648 Concerning ALEBA's representation in the staff delegations of enterprises in the only sector in which it is established, the Government states that, while it is significant, it far from attains the level of importance claimed in the complaint. According to the most recent figures officially produced by the Labour and Mines Inspectorate, the body officially responsible for assessing the results of the November 1998 social elections, ALEBA gained 182 of the 570 seats so far notified to the Inspectorate, or 31.93 per cent.
• Freedom of association in Luxembourg
  649. 649 The Government emphasizes that Luxembourg has clearly recognized and respected freedom of association through ratification of the international instruments for the protection and exercise of human rights. Moreover, article 11(5) of the Constitution of Luxembourg guarantees trade union freedoms. The Government stresses that any occupational group fulfilling the structural and functional criteria laid down by the 1965 Act, in other words being an occupational group having its own organization with the objective of representing its members, defending their occupational interests and improving their living conditions, can claim recognition as a trade union in full conformity with the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87). Trade unions, including ALEBA, benefit from all of the rights ensuing from Convention No. 87, namely the right to establish themselves without previous authorization, to draw up their internal and administrative constitutions and rules, to elect their representatives in full freedom, to appoint their representatives freely to higher bodies, to organize their administration and activities and to formulate their programmes and demands. All trade unions, including ALEBA, can exist, accept members, protect their interests, exert pressure and demonstrate. The Government emphasizes that the establishment and functioning of trade unions in Luxembourg are, through the principles ensuing from the Constitution of Luxembourg and the international labour Conventions, based on an absolute liberalism which moreover is a powerful factor encouraging the development of trade union pluralism. Luxembourg has at least ten trade unions of various sizes, which is a remarkable figure given the limited size of the country and the number, small in absolute terms, of economically active persons in Luxembourg (approximately 200,000 including cross-border workers).
• Representativeness and collective bargaining
  650. 650 The Luxembourg legislator, while fully respecting trade unions' freedom to establish themselves and to function, has found it appropriate to make some modifications to the rule of strict trade union equality, in connection with their representativeness, but only in the context of the right to sign collective agreements. The Government points to the relevant provisions of the 1965 Act. Section 2(1) of the 1965 Act gives the exclusive right to sign collective agreements to the most representative trade unions at the national level. Paragraph 3 of the same section lays down the criteria for assessing a trade union's representativeness at the national level. The criteria listed are the union's large membership, its activities and its independence from the employer. These criteria are objective, fixed and known by unions in advance. Several decisions of the Council of State, which was until the creation of the administrative jurisdictions the highest administrative jurisdiction in the country, have refined those criteria. The main ideas developed by the judges were the following: nationally representative trade unions should firstly protect their members' occupational interests and represent their members, the large size of their membership being one of the conditions for a trade union to be signatory to collective agreements (general/national criterion); nationally representative trade unions should establish that through their participation in bargaining and signing a collective agreement they are undertaking the protection of the occupational interests and representation of those of their members to whom the collective agreement in question will apply (criterion of activity in (each of) the sectors to which the collective agreement will apply); the use of the plural to refer to the most representative organizations at the national level shows that the legislator, while reinforcing the role of representative trade unionism at the national level, did not wish to depart from the pluralistic tradition: in order to determine the threshold below which a trade union may not be recognized as nationally representative, pragmatic considerations should be taken into account. For example, in a specific case, the Council of State had judged that a membership of 20 per cent of all union members among employees was the "large size" required by law. Moreover, the Council of State judged that the representative status of a union at the national level did not ensue ipso facto from being established at a purely sectoral level. The union needed, on the contrary, to demonstrate a large membership, and hence a certain membership in different sectors of economic activity.
  651. 651 The Government explains that the Luxembourg labour relations system does not tend to encourage the formation of trade union bodies organized by occupational branch, sector or at enterprise level with a view to only signing collective agreements. However, trade unions are placed on an equal footing during the negotiations. Single-sector trade unions, enterprise trade unions and even "house" trade unions are therefore not excluded from collective bargaining either by law or by the competent authorities. However, in excluding them from signing collective agreements in favour of unions which are representative at the national level, the national legislator intended to discourage the establishment of specialized unions and minimize the disadvantages of undue fragmentation of trade union efforts. In refusing to allow trade unions whose activities are confined to a single enterprise, economic sector or occupational branch to sign collective agreements, the law is seeking to check the harmful increase of trade union pluralism in a country characterized by, amongst other things, its limited size and the small number, in absolute terms, of workers, and unionized workers in particular (approximately 40 per cent of workers, according to union data).
  652. 652 In this context, the Government draws attention to the fact that Luxembourg law recognizes only two occupational categories: manual workers and private sector salaried employees. Hence, the 1965 Act allows each enterprise or division of an enterprise to conclude only one collective agreement for all of the private sector salaried employees and one for all of the manual workers, it being understood that the right to sign those agreements belongs to the most representative trade unions at the national level for each of those two occupational categories of workers. In this connection, the Government draws attention to the fact that any trade union may challenge, before the competent authorities, a refusal by the Minister to register a collective agreement on the grounds of the non-representative status of the trade union(s) signing it. It is in fact only at the stage of registration of a collective agreement that Luxembourg law provides for verification of the legal capacity of the signatory trade unions.
  653. 653 In the light of these details, the Government stresses that it never disputed the fact that ALEBA is a trade union entitled to the prerogatives provided under the international labour Conventions. The Government adds that it is not only permitted to participate in collective negotiations in the banking and insurance sector, but is the leader (federführend) in this respect despite the presence of national representative trade unions. With only one exception, all collective agreements in the sector have been signed only with the agreement of ALEBA. According to the Government, ALEBA has thus for decades, with only one exception, been de facto not only involved in bargaining, but even the co-signatory to the ensuing collective agreement.
  654. 654 In other words, Luxembourg law and jurisprudence in no way prevent ALEBA from participating in collective bargaining in the sector in which it enjoys a large following, nor even from "co-signing" a collective agreement signed by the nationally representative trade union. Moreover, the nationally representative trade unions have never objected to ALEBA's presence during collective bargaining in the banking and insurance sector. In addition, the Government has never refused to register a collective agreement co-signed by ALEBA. It is rather a case of the law and jurisprudence not permitting ALEBA to be the sole signatory to collective agreements since it does not fulfil the established representativeness criteria. ALEBA is a single-sector union and the workers it represents are, under Luxembourg law, part of the occupational category of private sector salaried employees and not a separate category for which it could claim to be representative at the national or sectoral level. From the Government's point of view, it appears that the complainant intends on its own initiative to create a new occupational category (private sector salaried employees in the banking sector) not recognized by the law and contrary to the safeguarding of social peace. Moreover, the Government considers that the ILO is not competent to pronounce on the existence of such an occupational category, which would be the only means for ALEBA to establish any kind of representative status.
  655. 655 Finally, the Government considers that ALEBA has diverged from national solidarity among workers and has directly endangered social peace in Luxembourg by attempting to be the sole signatory to the most recent collective agreement. In addition, the agreement fails to fulfil the European Union guidelines on employment as incorporated in the Luxembourg national plan of action for employment (a tripartite plan at national and multi-sector levels) and in the Act of 12 February 1999 which transposes that national plan of action for employment and modifies the 1965 Act by imposing on the parties an obligation to negotiate on the four specific subjects linked to employment and to combating unemployment.
• ALEBA-UEP federation
  656. 656 Concerning the ALEBA-UEP federation, the Government states that pursuant to section 2 of the 1965 Act, only trade unions that are the most representative at the national level may be parties to a collective agreement. Hence, a trade union not only has to pursue a trade union objective, but must also be an organization, and must constitute a trade union and not merely a confederation of two or more trade unions. Trade unions that sign a collective agreement are required to meet the criteria for representative status themselves without having to resort to forming a confederation with other trade unions to this end. The Government emphasizes that the collective agreement at issue referred to by ALEBA in its complaint was signed on 29 April 1999, i.e. two days after the establishment of the ALEBA-UEP trade union federation which is in fact a confederation. Hence it is clear that the collective agreement was entirely negotiated by ALEBA before the ALEBA-UEP confederation even existed, as the latter was established for the sole purpose of creating the impression that a trade union federation meeting the criteria laid down in section 2 of the 1965 Act was involved. The Government points out that the signature of the collective agreement by ALEBA-UEP was done in evasion of the law, the evasion consisting of establishing a trade union federation for the sole purpose of being able to sign a collective agreement that had already been entirely negotiated by one of the constituent trade unions.
• Independence of ALEBA
  657. 657 As regards the independence of ALEBA, the Government recalls that the independence of trade union organizations is necessary to guarantee flawless protection of members' interests without external pressure. The legal term "independence" means economic independence from employers. The officers of a trade union should be remunerated exclusively out of membership dues and should in no way be answerable to an employer. The Government emphasizes that, in the case of ALEBA, there does not appear to be any such independence since all of the officers of this organization are still in the service of a bank or an insurance company. Moreover, the Government notes that the ABBL and ALEBA instituted joint proceedings against a ministerial order refusing to register a collective agreement that had been signed only by ALEBA, which would seem to prove that the interests of the two organizations are linked.
  658. 658 The Government attaches to its communication reports presented by the Independent Trade Union Confederation of Luxembourg (OGB-L) and the Luxembourg Confederation of Christian Trade Unions (LCGB), which consider ALEBA's complaint to be unfounded and categorically contest all the figures put forward by ALEBA.
  659. 659 In a communication dated 16 May 2000, the Government sends a joint letter from the Presidents of OGB-L and LCGB in which they reiterate their opposition to the complaint presented by ALEBA and contest once again the figures put forward by ALEBA with regard to the number of its members. OGB-L and LCGB also raise the question of the lack of independence of ALEBA vis-à-vis the employers of the banking sector.
  660. 660 Finally, in a communication of 27 October 2000, the Government provides a copy of the judgement issued by the Administrative Tribunal of Luxembourg, which recognizes the national representativity of ALEBA. The Government states that it is entitled to appeal this judgement but has not yet made a decision on this point.

C. The Committee's conclusions

1. 661. The present complaint concerns difficulties encountered by the complainant, the Luxembourg Association of Bank and Insurance Employees (ALEBA), in being recognized as a representative trade union under the 1965 Luxembourg Act on collective agreements ("the 1965 Act").
2. 662. The Government emphasizes that ALEBA's status as a trade union has never been disputed in so far as it meets the structural and functional criteria laid down by the 1965 Act in that respect, namely that it is an occupational group "having [its] own organization with the objective of representing [its] members, defending their occupational interests and improving their living conditions". It is only the issue of the complainant's representative status, an essential criterion for signing collective agreements, that gives rise to the complaint.
3. 663. The Committee notes that the 1965 Act and the issue of the representative status of workers' organizations in Luxembourg have already been examined [see Case No. 590, 119th Report, paras. 33-63]. Before returning to the conclusions reached by the Committee at that time and subsequently pronouncing on the case in point, the Committee wishes to mention the relevant principles which have been developed concerning the representative status of trade unions.
4. 664. Concerning representative status and collective bargaining, the Committee observes that various instruments adopted by the International Labour Conference refer expressly to the concepts of representative status or representative organizations; in this connection, the Committee points to the preparatory work for the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), and to the Collective Agreements Recommendation, 1951 (No. 91), and the Collective Bargaining Recommendation, 1981 (No. 163). In addition, the Committee notes that under Article 4 of Convention No. 98, governments shall take measures appropriate to national conditions to encourage and promote machinery for voluntary negotiation of collective agreements. In this context, the Committee has always emphasized the importance of workers being able to choose the organization which represents them; the public authorities should refrain from all intervention liable to influence or vitiate that free choice. However, since the diversity of the trends in the trade union movement has led legislators to reserve certain rights for organizations with the largest following among workers, the Committee has admitted the drawing of a distinction between unions, by one system or another, according to the extent to which they are representative [see in particular Case No. 918, 197th Report, para. 157]. Thus, the Committee has accepted that, for the purposes of collective bargaining, a distinction may be drawn between the most representative organizations and all others, acknowledging that the former may have preferential bargaining rights, including as regards the conclusion of collective agreements. However, in adopting this position, the Committee has insisted on the necessity of having objective standards for deciding on the representativeness of organizations [see Case No. 590, 119th Report, para. 59].
5. 665. The Committee considers it appropriate at this stage to recall the conclusions which it reached in the above case and which also referred to the 1965 Act. In that matter, the Committee had before it a complaint presented by a Luxembourg trade union which considered itself the most representative of a category of workers not recognized as a special category for the purposes of collective bargaining. The union was already legally recognized at the national level but did not have the capacity to conclude separate collective agreements on behalf of its members. The Committee, taking into account national conditions, notably the small size of the country, which justified granting the right to negotiate only to those organizations which were most representative at the national level, had considered that neither the law nor practice should prevent a union representing the majority of workers of a certain category from furthering the interests of its members. The Committee had recommended the Governing Body to request the Government to examine the measures which it might take in order to afford the union in question the possibility of being associated with the collective bargaining process so as to permit it adequately to represent and defend the collective interests of its members [ibid., para. 63].
6. 666. In the case in point, according to the information brought to the attention of the Committee by the complainant, ALEBA is a trade union with approximately 9,200 members, recruited essentially among the 19,195 employees of banks and insurance companies established in Luxembourg (1998 data from the Chamber of Private Sector Salaried Employees). In November 1998, at the last elections to the Chamber of Private Sector Salaried Employees, ALEBA gained 68 per cent of the votes in the banking and insurance group (group III), which gives the union a large majority in that body. The Committee notes, however, that both the Government and the trade union confederations OGB-L and LCGB contest certain figures put forward by ALEBA that would seem to demonstrate its majority in the sector concerned.
7. 667. The Committee notes however that the Government in no way disputes the key role played by the complainant in the banking and insurance sector. On the contrary, the Committee notes the Government's declaration that Luxembourg law and jurisprudence in no way prevent ALEBA from participating in collective bargaining in the sector in which it enjoys a large following. Moreover, the Committee notes that the complainant has not only participated for many years in the negotiation of almost all collective agreements signed concerning group III, "banking and insurance", but that its president on its behalf has acted as an inter-union spokesperson. The Government emphasizes that with only one exception, all collective agreements in the sector were signed only with the agreement of ALEBA; in addition, all but one were declared generally binding.
8. 668. Nobody disputes the fact that ALEBA has participated in collective bargaining in its sector and has on numerous occasions even signed the ensuing collective agreements together with other unions recognized as representative. The issue here is the representative status of the complainant - which would permit it to be the sole signatory to collective agreements - pursuant to the 1965 Act and case law.
9. 669. As regards legislation, the Committee considers it appropriate, at this stage, to recall the relevant provisions of the 1965 Act, namely paragraphs 1, 2 and 3 of section 2, which state as follows:
   • Only trade unions that are the most representative at the national level may be parties to a collective agreement: Provided that individual employers or groups of employers may be parties to such an agreement.
   • All occupational groups having their own organization with the objective of representing their members, defending their occupational interests and improving their living conditions shall be deemed to be trade unions.
   • The most representative trade unions shall be deemed to be those which are distinguished by their large membership, by their activities and their independence.
   • According to the 1965 Act, the most representative trade unions are those which are prominent by reason of their large membership, by their activities and their independence. Those criteria are sufficiently objective, precise and conclusive, in the Committee's opinion, to allow identification of the representative organizations. However, the 1965 Act also provides that organizations must be representative at the national level; the Act provides no further particulars about this. The Committee notes that the Act in question has been addressed in at least three cases, which elucidated the legislator's intention in respect of "the national level". From those decisions, copies of which have been provided to the Committee, and from the information brought to the Committee's attention, it follows that, in order to be representative at the national level, a workers' organization must demonstrate both national and multi-sectoral representation in one or other of the occupational groups recognized by law, in other words private sector employees or manual workers. In order to claim to be representative and have the capacity to be the sole signatory to collective agreements, the organization in question needs to demonstrate the size of its membership and thus a certain following in different sectors of economic activity in one or other group. The Committee considers that the combination of these two requirements - national and multi-sectoral representativeness - for the signing of collective agreements raises problems with regard to the principles of freedom of association in terms of representativeness. Its application could have the consequence of preventing a representative union in a given sector from being the sole signatory to the collective agreements ensuing from the collective negotiations in which it has participated.
10. 670. In the present case, the Committee notes that, though the complainant represents a large number of salaried employees in the banking and insurance sector at the national level, it cannot be the sole signatory to collective agreements negotiated by it and covering the workers of that sector, since the Government does not consider it to be representative because it cannot demonstrate a following in different sectors of economic activity. The Committee considers the interpretation by the competent Luxembourg authorities of the 1965 Act in imposing national and multi-sectoral representation to be contrary to the principles of freedom of association since it prevents the most representative union in a given sector from being the sole signatory to collective agreements and thus from defending fully the interests of the workers whom it represents. The unions with the right to negotiate collective agreements with a view to the regulation of terms and conditions of employment (to use the words of Convention No. 98) should be designated according to pre-established objective criteria. It appears clear that the size of membership or the results of occupational elections meet that requirement for pre?established objective criteria. The Committee thus finds itself obliged to reiterate the conclusions which it reached in its previous examination of the case of Luxembourg (Case No. 590), namely that ALEBA should be associated with the collective bargaining process in its sector. In the Committee's view, such an association with the negotiation process, in order to be fully effective and real, implies that ALEBA should be able to sign, and where necessary to be the sole signatory to, ensuing agreements when it wishes, provided that its representativeness in the sector has been objectively demonstrated.
11. 671. Moreover, the Committee considers that participation in collective bargaining and in signing the ensuing agreements necessarily implies independence of the signatories from the employer or employers' organizations as well as from the authorities. It is only when their independence is established that trade union organizations may have access to bargaining.
12. 672. Accordingly, in order to determine whether an organization has the capacity to be the sole signatory to collective agreements, two criteria should be applied: that of representativeness and that of independence. In the Committee's view, the determination of which organizations meet these criteria should be carried out by a body offering every guarantee of independence and objectivity.
13. 673. The Committee takes note of the judgement issued on 24 October 2000 by the Administrative Tribunal of Luxembourg, which recognizes the national representativity of ALEBA for the purpose of signing collective agreements.
14. 674. In this context, the Committee requests the Government to examine the situation anew in the light of its conclusions and requests it to take the necessary measures so that a trade union whose representativeness in a sector has been objectively demonstrated and whose independence is established is able to sign, and where necessary to be the sole signatory to, collective agreements, in order to make Luxembourg practice fully compatible with freedom of association. The Committee requests the Government to keep it informed in this respect.

The Committee's recommendations

1. 675. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee requests the Government to examine the situation anew in the light of its conclusions and to take the necessary measures so that an organization whose representativeness, in line with ILO principles, has been objectively demonstrated and whose independence is established is able to sign, and where necessary to be the sole signatory to, collective agreements, in order to make Luxembourg practice fully compatible with freedom of association. The Committee requests the Government to keep it informed in this respect.
   • (b) The Committee draws the attention of the Committee of Experts on the Application of Conventions and Recommendations to the legislative aspects of this case.